Securing loans for a brighter future in Tanzania

Published: 9 September 2013 13:00 CET

To help lift people out of a cycle of poverty, the Tanzanian Red Cross National Society implemented a programme that allowed people to receive loans. Elifaz used the loan to expand his shop. Photo: Rebecca Lefort, British Red Cross

To borrow money, a member must submit a proposal which is then considered by their group and, if they are successful, they must eventually pay back the loan with interest. Photo: Rebecca Lefort, British Red Cross

People have used the loans to open shops and small businesses, contributing to their resiliency. Helena Israel now has a bigger, more secure business, selling large sacks of fish. Photo: Rebecca Lefort, British Red Cross

For people in the rural fishing and mining community of Bugwema, poverty stopped them from reaching their dreams. Previously unable to access bank loans, now they have a brighter future. Photo: Rebecca Lefort, British Red Cross

Everyone has a dream. Helena Israel dreamt of ensuring her son became the first member of her family to study at university. Jackson Mujungu Makene dreamt of starting a fishing business so he could send his children to school. And Elifaz Kujerwa dreamt of moving his small village store to a bigger shop with more goods for his neighbours to buy.

However, for the trio of would-be entrepreneurs from the rural fishing and mining community of Bugwema in north Tanzania, poverty stopped them from reaching their dreams. Like many other villagers from remote areas of the country, they were unable to access bank loans or borrow the capital they needed. Then the Tanzania Red Cross National Society stepped in, providing the training and infrastructure to set up a credit scheme to start lending money.

The scheme, dubbed “worth”, quickly attracted 35 members. Helena, Jackson and Elifaz all received loans. “I got 150,000 Tanzanian shillings (95 US dollars) for a small fish business,” said Helena, a 50-year-old mother of 10. “Before I was just selling fish and tomatoes on the side of the road whenever I could. Now I have a bigger, more secure business, selling large sacks of fish.

“Life now is much better compared to how it was before when I worried about money all the time. I was worried about how I would send my children to school, now I have been able to send my son to university in Dar es Salaam to study science. He is the first person from my family to go to university. I am so proud. Before I got the loan, I lived in a house with a grass roof, but now I have been able to afford iron sheeting. The new roof is better and safer, and it also collects water.”

To be part of the scheme, members must be considered trustworthy, commit a bond, and pay regular contributions to the fund. To borrow money, a member must submit a proposal which is then considered by the group and, if they are successful, they must eventually pay back the loan with interest.

Jackson, who is 54 and has eight children, said: “I was so pleased that I was given a loan. I used the money to buy fishing nets and it has made a big difference. Before I was not fishing because I didn’t have the nets, I was simply farming. I wasn’t getting enough money from farming so I decided to start fishing as well. The change has boosted my income by 50 per cent. Now I have improved my life, now I can send my children to school, and buy better food.”

Elifaz, 37, who received 270,000 Tanzanian shillings (170 US dollars) to help expand his shop, added: “I bought a space that is three times bigger. Now I can sell more, like sugar and soda. And now I can charge mobile phones, which helps the community.”

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